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New leasehold reform Bill to help those "stranded in their homes"

Labour MP Justin Madders is working on a Private Members' Bill creating leasehold reform in a bid to help leaseholders who, he says, "feel trapped in their homes".

Madders, MP for Ellesmere Port and Neston, presented the Bill to the House of Commons earlier this week. It has the backing of enfranchisement specialists Leasehold Solutions, and calls for "a fair and simple mechanism to help leaseholders escape from their current leasehold agreements."

It calls for calls for three reforms to leasehold legislation:


Introduce a statutory pricing model to calculate the cost of a freehold purchase, which would be capped at 10 times the annual ground rent payable by the leaseholder;

  • Make provision about the award of legal costs in leasehold property tribunal cases, so that the legal costs of the freeholder would no longer be borne by the leaseholder;

  • Establish a compensation scheme in cases where leaseholders have received misleading information from sales agents or inadequate advice from solicitors. 

  • Madders has condemned the "astronomical sums" that freeholders demand for the purchase of a property's freehold and "exorbitant" doubling ground rent clauses, which he said were simply a "cash cow" for builders and freeholders.

    Louie Burns, Managing Director of Leasehold Solutions, says: "We very much welcome the policies that Mr Madders advocates in his Private Members Bill, which are all very sensible, progressive reforms to leasehold legislation that would provide a tremendous benefit to leaseholders across the country.

    "The introduction of a statutory pricing model for calculating the cost of a freehold acquisition, capped at 10 times the current annual ground rent, would provide greater transparency and ensure that leaseholders are treated consistently, which is simply not the case under the current laws.

    "Further, the way that the value of a lease extension is currently calculated is very unclear and enables freeholders to force leaseholders to pay over the odds for their lease extension, or go through the costly process of challenging the freeholder at Tribunal.

    "This legal bullying costs leaseholders millions of pounds every year and the Government over £30 million a year to run the Tribunals, all for the benefit of freeholders' wallets. Changing the calculation of a lease extension to something transparent and easy to calculate will save leaseholders and the tax payer millions in wasted costs."


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